In a long-expected move, bankrupt Spanish textiles firm Saez Merino has presented a redundancy contract to eliminate 650 or 70% of its workforce, a top union official told just-style late Wednesday.

The move is part of a plan to shift production outside Spain and maintain key management operations at home.

The bankruptcy judge on Wednesday approved the redundancy plan which calls for the company to pay workers minimum severance compensation, said Miguel Angel Castello, secretary general for main union Comisiones Obereras (CCOO) in Valencia, Spain, where Saez is headquartered.

"We are not going to allow this and we will launch demonstrations, lock-ups and strikes, as well as hold meetings with the judge and the local government," Castello said.

His comments come as worker reps called for indefinite strikes earlier this month to protest Saez's restructuring, which envisages the company moving output outside Spain to concentrate more key brand and logistic operations in Spain.

In autumn 2004, struggling Saez (which has had great difficulty surviving formidable competition from Asian rivals), moved much of its production to Morocco.

According to the redunancy plan, which Castello outlined for just-style, Saez will dismiss 650 of its 950-strong Spanish staff.

Most layoffs will come from group unit Saez Merino Sewing, which wants to shed 328 of 404 workers. The remainder of the workers will leave from factories in Cheste, Segover, Quart de Poblet and other locations near Valencia. 

While most redundancies involve blue collar workers, the company will also downsize some commercial and management divisions.

Saez did not return several messages seeking comment.

By Ivan Castano